HOUSE_OVERSIGHT_024858.jpg

COWEN COLLABORATIVE INSIGHTS February 25, 2019 There are a solid amount of beverage companies currently playing within the space, largely price positioned within the mainstream and value segments of the market. We would highlight that on a price per mg basis, beverages skew higher across the board, relative to tinctures, capsules and gummies. Figure 70 Beverage Price Points Are Premium Relative To Tinctures, Capsules, Gummies, And Topicals SOCOREF ONUNON OududM $110 s100 $1.00 CBD Living Root Origins Super Premium (> $0.83) CBD Beverages by Price Segment $0.80 $0.63 6953 §053 $0.50 $0.50 $046 $0.42 ¢0.40 $0.35 $034 Aurora Elixers Endo Brands Mountjoy Diamond CBD Kickback Camnabinoid Creations Main ($0.29-50.56) EVERx Nutrition $025 $021 $0.20 $0.16 0,12 Hemp Bombs Rocky Mountain Source: Company Websites and Cowen and Company Note: Reflects price per mg of CBD; For companies with multiple SKUs, we used a straight line average Based on our survey, of respondents that use CBD, 19.2% use beverages as a form factor, which is admittedly higher than we would’ve expected given the nascent stage of the category. Similar to both capsules and topicals, beverage use is a more popular choice among younger, lower income consumers (by a wider margin relative to other age cohorts compared to the other categories). This leaves us optimistic on the future prospects of the category as a waterfall effect can result in an increase in category mix. Figure 71 Popularity Among Younger Consumers Can Result In A Waterfall Effect Over Time 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% CBD Beverage Use 28.8% Male Female <S50K Gender $50K-$100K >$100K Income Source: Cowen Survey, n=~2500, January 2019 42 COWEN.COM HOUSE_OVERSIGHT_024858